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But the loans Bank of America took on through the acquisition of mortgage lender Countrywide Financial continue to perform worse than management had expected.

Overall, "We believe we may have peaked in total credit losses this quarter, although the levels going forward will continue to be elevated and certain businesses will still experience higher losses," Lewis told investors during a conference call after reporting third-quarter earnings.

Specifically, "consumer charge-offs may be close to peaking in dollar terms year end, although they will stay elevated," Lewis said.

He added, although loan losses are expected to peak this year, they "will continue to remain high going into 2010" and additions to the loan-loss reserves "will likely continue at least through the fourth quarter."

Lewis said BofA believes the economy is stabilizing and customer sentiment is improving.

"Our outlook for the economy is close to the consensus view with unemployment peaking around the 10% level. We believe the pace of new bankruptcy for individuals have slowed somewhat but still see some additional pressure on home prices. Based on this economic scenario, results in the fourth quarter were expected to continue to be challenging as we close the year."

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